Sarbanes-Oxley Act

Sarbanes Oxley is an added cost to any organization which has to comply with the regulation, yet gives investors more confidence in financial details. Compare the costs to the benefits to determine whether you are for or against this legislation. State your reasons with your answer.

Feb 20 2012 08:22 PM

3 Approved Answers

Sarbanes-Oxely Act of 2002, is a United States federal law which was passed in response to a number of major corporate & accounting scandals. The Enron scandal & Worldcom scandal resulted in decline of public trust in accounting & reporting practices.This act establishes a new quasi-public authority which can regulate the work of accounting firms in their role as an auditor of public companies so that the scandals like that of Satyam can be prevented. Though is an added cost of compliance for an organisation it helps in generating investor's confidence as it ensures more transparency & accountability.This Act provides for an internal control report which should be contained in Company's annual report which will give an assurance that internal controls are strong in an organisation, there is no significant deficiency & ultimately the...

ancial statements are showing true & fair view. The major provisions of this Act such as accelarated reporting of imsider trading, enhanced criminal & civil proceedings for violation of securities law, additional disclosure ,auditor's independence, compliance with clause 49 covers issues such as corporate governance & enhance financial dislosure. As a company cannot survive on its own it has to discharge responsibilty towards its owners. Thus there is an extra cost of compliance for the company but as it helps in buliding public trust i go for the legislation.

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Public Interest Theory: The public theory explains the regulation of the government that seeks the protection and benefit of the public at large. When we speak about regulation, its...

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Business plan for an electronics retail store Summary The business plan is for an electronics retail store that will sell Apple products, which includes Apples tables, laptops, computers,...

How has the Sarbanes-Oxley Act strengthend internal controls of an organization?

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The Sarbanes-Oxley act was designed to increase transparency in publicly traded companies and thereby prevent fraud. Further, it hold management accountable for any discrepancies in the...